Wealth management was traditionally the preserve of middle-aged men. But the client demographic is changing. “In the past, clients were males in their 50s, usually executives,” explains Gareth McCluskey, senior portfolio manager with Davy.
“That has changed significantly over time. The age profile has changed a lot. We’re seeing a lot more young people – in their 30s and 40s – coming through. This is due in part to the number of tech companies located in Ireland. So you have younger people being paid well but also with stock options. Suddenly they have found themselves wealthier than they were five years ago.”
These younger investors are bringing a heretofore unseen amount of investment knowledge to their wealth managers, who have had to up their game.
‘Education in investment’
“There’s more coverage than ever before of the markets on TV, radio and newspapers,” says McCluskey. “It probably started around 2008-2009, when everyone got an education in investment, whether they wanted it or not.
“Access to info around investing and planning, through Twitter and other social media has increased people’s ability to get real-time info.”
Armed with this information, clients expect more from their wealth managers. “Every year we do a ‘Voice of the Client’ survey where we ask a number of our clients questions. The big feedback is always that clients are looking for more from us than they did five years ago. “That’s why Davy went from Davy Stockbrokers to just Davy. We’re not just stockbrokers anymore. Based on clients’ demand, we have had to adapt and learn about more than just investment, and move more deeply into tax, retirement etc. And all of this additional expertise is expected by the modern wealth management client.”
Wealth managers have seen a notable rise in the number of people looking for advice on inheritance. Rising taxes on what one leaves behind is a source of frustration for many people who have worked their whole lives so that they could leave something to their loved ones, only to have it eaten up by the State. Any advice that can help reduce this tax burden, therefore, is welcome. “The subject of inheritance comes into almost every conversation we have,” says Nigel Poynton of Investec.
‘Succession planning’
“Succession planning is a big one,” says McCluskey. “Inheritance tax has changed here so now a third of what you have amassed in your lifetime goes to Revenue. It’s a tough pill to swallow for many. So people want to know how to maximise the amount of their estate that passes to the next generation.”
“We frequently advise on how best to sell a business, property or other asset for inheritance purposes,” says George Flynn, associate director of Smith & Williamson Investment Services. “We’re seeing a rise in family partnerships, where parents want to pass money onto their children now but retain control of the assets in the children’s name.”
Overall, things are looking up in the wealth management game. “Things have definitely picked up in the last few years,” adds McCluskey. “The number of clients has increased, but they also have more to invest. Good news all round.”